CIGNA, the health insurance company, has launched an ad campaign for $25 million that is geared toward strengthening its business in the individual market.
According to the Wall Street Journal, individual policies comprise only between 1 and 2 percent of CIGNA’s current revenue. The majority of the insurer’s profits are from insurance that is employer-based.
However, as a result of the new healthcare reform laws, individual markets are about to become significantly more lucrative. In fact, the Congressional Budget Office (CBO) has projected that by the year 2019, there will be twice the number of Americans purchasing individual health insurance when compared to the numbers today.
Therefore, to ensure their position in that market, CIGNA has started running ads for individual health insurance in various popular magazines such as Marie Claire, Family Circle, and Time with message.
This is indicative of a trend that is growing across the industry, where insurers are beginning to reach out to individuals in a more aggressive fashion than has ever been seen before. In fact, a Boston Consulting Group survey indicated that 73 percent of insurers have stated that they intend to boost their individual market business.
At the 2011 J.P. Morgan Healthcare Conference, almost every health plan presented to investors included an intention to grow its individual policy numbers. The consulting group stated that they predict that the profits from insurance companies will “more than double from 2011 to 2019, to about $1.2 trillion.” This will be the result of this new market being created by the health reform law.